Are you a high school student graduating this spring? Are you planning to pursue a post-secondary degree in Accounting, Commerce or Business Management?
Find out more about the WWO 2016 Scholarship by following this link and selecting “High School Application” : http://woodmanwhite.ca/wp-content/uploads/2015/11/2016-Scholarship-Application.pdf
MyCra is a mobile app from the Canada Revenue Agency for individual taxpayers. It allows secure access to view key portions of their tax information such as their Notice of Assessment, tax return status, and RRSP and TFSA contribution room. Follow the link to find out more!
For the 2015 tax year the deduction limits have increased by $1,000 annually per child for child care expenses as follows:
- For each child who is eligible for the Disability Tax Credit, the 2015 deduction limit is $11,000
- For each child who is under 7 years of age at the end of the year, the 2015 deduction limit is $8,000
- For each child who is aged 7 to 16 the 2015 deduction limit is $5,000
You can claim child care expenses that were incurred for services provided in 2015 such as payments made to caregivers providing child care services, day nursery schools and day care centers, educational institutions for the part relating to child care services, day camps and day sports schools where the primary goal of the camp is to care for children. However, you cannot claim payments for medical care, hospital care, clothing costs or transportation costs.
Note that if there is more than one person supporting the eligible child, it is the lower net income spouse that must claim the child care expenses.
For 2014 and 2015, Budget 2015 introduces a change to the calculation of the Family Tax Cut to allow the unused tuition, textbook and education credits transferred from a spouse or common-law partner. This change will affect a very small percentage of families, and will ensure that these families receive the appropriate value of the Family Tax Cut. The change may provide affected taxpayers between $2 and $750 more for the Family Tax Cut.
The CRA will automatically reassess taxpayers now that Royal Assent has been received, where it is apparent that they are entitled to an increased amount of the Family Tax Cut for 2014. If you are in this situation, you won’t need to ask the CRA for an adjustment.
Note that the Minister of Finance on December 7, 2015 announced the government’s intention to eliminate the Family Tax Cut for 2016 and subsequent years.
If you have capital gains arising from the disposition of certain properties, you may be eligible for the cumulative capital gains deduction, and may be able to reduce your taxable income. For dispositions in 2015 of qualified small business corporation shares and qualified farm or fishing property, the lifetime capital gains exemption (LCGE) limit has increased to $813,600. For 2016, the amount is $824,176. The deduction limit is indexed annually to inflation using the Consumer Price Index data as reported by Statistics Canada. In addition, for dispositions of qualified farm and fishing property after April 20, 2015, the 2015 federal budget introduced an additional deduction which increases the LCGE to $1,000,000.
Are you living common law? This applies to a person who is not your spouse (legally married), with whom you are living in a conjugal relationship, and whom at least one of the following situations applies. He or she:
- Has been living with you in a conjugal relationship and this current relationship has lasted at least 12 continuous months. Note in this definition, 12 continuous months includes any period you were separated for less than 90 days because of a breakdown in your relationship
- Is the parent of your child by birth or adoption, or
- Has custody and control of your child (or had custody and control immediately before the child turned 19 years of age) and your child is wholly dependent on that person for support.
Make sure that you are correctly claiming your marital status on your 2015 tax return!
Are you curious as to what your family Child Benefit amount may be under the new budget? Here is a tool to help you estimate the amount: http://www.budget.gc.ca/2016/tool-outil/ccb-ace-en.html
Are your children 16 years of age or younger? You need to read this!
For the 2015 tax year you can claim up to $1,000 of eligible fitness fees per child. The amount of the credit is 15% of the eligible costs. An important change for the 2015 year is that the Children’s Fitness Tax Credit is now refundable. This means that even if you are not paying any taxes you can get a refund from just claiming the Children’s Fitness Tax Credit for your children.
Note that children must have been 16 years of age at the beginning of the year in which an eligible fitness expense was paid. Examples of eligible costs include costs for hockey, golf lessons, horse-back riding and bowling.
There are very specific rules when it comes to claiming Attendant Care as a medical expense while also claiming the Disability Tax Credit. If you have a loved one who is being cared for at a school, institution or other place such as a detoxification clinic, and is also eligible for the Disability Tax Credit the tax payer may be able to claim both the costs of Attendant Care and the Disability Tax Credit. Certain certification is required. Form T2201 (Disability Tax Credit Certificate) must be on file with the Canada Revenue Agency and appropriately qualified person must certify in writing that because of a mental or physical impairment, you need the equipment, facilities or personnel specially provided by that place for persons with the same type of impairments. Note an appropriately qualified person includes a medical practitioner and can also include the principal of the school or head of the institution or other place.
Don’t hesitate to give us a call or book an appointment if you have any questions!
To Our Clients:
We are writing to provide you with information about the documentation that is now being required by Canada Revenue Agency to support your claims for medical expenses due to changes in their Administrative policies.
This may result in both you and we having to spend additional time and effort related to your claim, specifically at the time of filing, or if the documentation is not on hand then, if and when your claim is reviewed.
Documentation required to support medical expenses:
- Medical service costs must be supported by receipts for the service and proof of payment.
- If a portion of the medical expenses was covered under an insurance plan, you may claim both the amount not reimbursed as a deductible portion plus the costs of the insurance. The cost of the insurance must be supported by receipts unless the plan is an employer based plan where the employer has recorded the eligible portion of the expense in Box 85 of your T4 Slip.
- Claims for costs of plans such as Alberta Blue Cross require a payment confirmation available from ABC. Please note that no provincial health care premiums are deductible.
- Costs of medical services provide purely for cosmetic purposes may not be considered to be an eligible medical expense.
- Please note that items, whether prescribed or not, that are not a drug requiring a prescription in order to obtain them, such as vitamins, holistic supplements etc. are not deductible.
- Should you acquire the report from your Pharmacist detailing the prescriptions that are filled:
- The report must show the details including the DIN of each item, and
- If the report includes non-prescription vitamins or supplements, they must be identified because they cannot be claimed. Please assist us by identifying these non-deductible items
- Where costs of attendant care are paid there are very specific rules related to claiming either or both those costs and the Disability Tax Credit. Should you possibly be in this situation, you will need to discuss this matter with us.
Supporting costs of medical travel:
- If you are required to travel in order to receive medical attention you must be able to support that:
- The particular medical service is not available in the city or town in which you reside
- If the services are available in your city or town, the letter must state the additional reason(s) that the particular medical centre to which you travelled had to be used. They are requiring that this be so because of some significant difference, such as:
- This is the closest medical centre in which the service is available
- Due to a waiting list situation, you were able to receive the service in a significantly reduced time
- The cost of the service at the particular location was significantly less than it would be at a medical centre closer to your residence
- You must provide proof of attendance at the particular appointments provided by the medical centre, the physician’s or other medical practitioner’s office, the hospital or other facility, such as a client ledger prepared and printed on stationery to identify the facility
- You must provide proof of the distance travelled. Mileage can be claimed where the distance to obtain the service is greater than 40 km. Other travel expenses can be claimed where the distance to obtain the medical service is greater than 80 km.
- Claims for mileage and meals may be calculated using the simplified method, or
- They may be based on the actual cost method. Note that the detailed method requires that vehicle costs for the entire year be detailed and prorated between medical travel and total mileage for the year
- If you were required to stay in accommodation in order to receive the medical service, you must have receipts for the accommodation cost
- Parking costs must be supported by receipts
- If you must be accompanied by someone in travelling to acquire the medical service, this must be stipulated in the letter. Note that where the patient is a child, they will not accept that both parents had to accompany the child
Should you need further information, we would be pleased to provide you with Canada Revenue Agency’s Income Tax Folio S1-F1-C1, Medical Expense Tax Credit, a 30 page document detailing the medical expense tax credit.
Happy New Year’s from all of us at Woodman White Olsen & Co., LLP.
There have been some fairly significant changes in the rates of tax over the past six months, starting with the Alberta announcement of tax increases of 2% on corporate income over the $500,000 small business limit or on corporate income that is not eligible for the small business deduction such as property income. As well there has been an increase in personal rates of anywhere between 0% and 5% based on the amount of taxable income. While these increases were applied at ½ the announced change for 2015 income, they come fully into force tomorrow morning (2016).
And then in December, the new federal government announced its changes which also take effect after midnight.
While those with personal taxable income between $45,282 and $90,563 will see a reduction of 1.5% on their income above $45,282, those with income above $200,000 will see a 4% increase in the amount of tax on their taxable income above $200,000.
We need to remember that the rate changes both federally and provincially apply to just that portion of the income in the particular income bracket as everyone still gets the benefit of the lower tax rates on the portion of their income within those lower ranges.
Corporations with investment income will see a large change in the tax rates applied to the investment income – 4% – however, if this is flowed out to the shareholders as dividends, the process involved in the Refundable Dividend Tax on Hand method will eliminate that increase – corporately. However, the personal rates applied to dividend income have increased, particularly in Alberta and where the taxable income is entering the top marginal rates.
It will be much more important to ensure that planning of the method in which the income is received takes place as we move through the next several years if you are a business owner.
We also expect that our clients will experience some surprises as we prepare the 2015 personal income tax returns. This surprise is due to the change in the method of getting personal credits for children for the 2015 and subsequent tax years.
Those people who have children under the age of 18 and who are employees – and who completed the new TD1 form for their employers, will have seen that the federal tax deduction from their paycheque increased by $28 every month and won’t be surprised when signing their tax return.
However, self-employed people with children are going to see an increase in the federal taxes payable for 2015 of $338 per child.
This isn’t actually an decrease of net family cash flow as, during 2015 the federal government had increased the Child Tax Benefits received by eligible families to compensate for removing the federal tax credit for children, but where tax isn’t deducted from your income, the taxes payable at the end of April 2016 will be larger because of this.
Please remember too, that the amount that can be deposited to your Tax Free Savings Account has reverted to $5,500 for any amounts deposited after December 31, 2015.
Please don’t hesitate to contact us at the office at 403-327-3101 for assistance with your tax planning needs – we would be happy to help!
2015 was a significant year for the political landscape of Alberta and Canada as a whole with election wins by the NDP party of Alberta and the Liberal Party of Canada respectively. Part of the platforms of both governing parties was a promise to increase taxation on higher income earners. With announced changes to the federal income tax brackets announced October 1, 2015 and the budget announcement in Alberta on October 27, 2015 below is a chart showing the taxation of income in Alberta for 2016.
Below is a basic illustration of how this change will impact taxpayers (single individual, no dependents):
Please don’t hesitate to contact the team at Woodman White Olsen & Co., LLP for all your tax planning and tax filing needs.
As of October 1st, 2015, Alberta’s general minimum wage has increased from $10.20 to $11.20 per hour. The liquor server minimum wage has increased from $9.20 to $10.70 per hour, and will be eliminated next year. These increases are the first step towards a single $15 per hour minimum wage. Weekly and monthly minimum wages are increasing as well.
Employers and employees with questions about minimum wages can contact the Employment Standards Contact Centre at 780-427-3731, or toll free at 1-877-427-3731 or visit work.alberta.ca/es.
Via Jobs, Skills, Training and Labour.
We have been talking a lot around the office this week regarding the new Universal Child Care Benefit. Some may not realize that this new UCCB is not only taxable, but also coincides with the elimination of the Child Tax Credit.
We are excited to be a sponsor of the Sutton Group – Lethbridge Habitat for Humanity Lethbridge golf tournament at Henderson Lake Golf Club this afternoon. We have a few team members volunteering at the event, and we have also entered a WWO team. Make sure you say hello if you are attending!
Another reminder to all of our clients, there is another round of CRA Scams going around. Please beware of telephone, mail, text message or email of fraudulent communication that claims to be from the Canada Revenue Agency requesting personal information. If you receive communication from CRA that you are weary about, please don’t hesitate to give us a call.
Just a friendly reminder to all of our client’s that both Woodman White Olsen & Co. offices will be closed on Friday, May 1st for a well deserved rest! We will re-open on Monday, May 4th to happily serve your needs!
Did you know that Safety Deposit fees are no longer deductible?
Did you know that the Fitness Tax Credit has increased from $500 to $1000 for the 2014 tax year?
Attention Tradespersons! Did you know that you are now eligible for up to $500 in costs of tools bought in 2013 for the use of your job!
Did you know that the Alberta medical travel rate per km has decreased? The 2014 rate is 45.5 cents/km. This applies only to medical travel and the moving expense simplified method. The rate for all other purposes is still 51.5 cents/km.
CRA is warning taxpayers about scams coming in the form of both phone calls and emails. These fraudulent calls are attempting to scare people into paying fake tax bills, and the fraudulent emails have been promising tax refunds.
Please note that you will never receive an email from a CRA representative, and they will never ask for credit card or banking information.
CRA asks for anyone who receives a suspicious communication to report it to firstname.lastname@example.org. Please see the link below for more information.
Ruth has over 30 years of experience in the Accounting Profession. Ruth specializes in audits and business consulting for small and medium sized businesses. Along with her CGA designation, Ruth has also passed the requirements for the CPA designation.
Ruth is married and has 2 grown children. Her interests include gardening and golfing.
Ian Woodman, CGA
Ian has over 30 years of experience in the Accounting Profession. He specializes in tax services, and had past experience working with the Canada Customs and Revenue Agency. In 2007 he and Ruth White established the firm of Woodman White & Associates. and he has been serving clients in Southern Alberta ever since.
Ian is married and has 3 grown children. His interests include hiking, kayaking and fencing. Ian has been an avid member of Scouts Canada for over 30 years.
Christmas has come to Woodman White Olsen & Co! We hope you are all keeping warm out there.
First, we would like to welcome all of our new followers! Second, we are asking you to take a few minutes of your time and write us a review on Facebook and Google – we would like to know your thoughts!
Thank-you for following us, you can look forward to a variety of posts from us in the near future!